Whole Foods
The 2010 fiscal year at Whole Foods ran for the year prior to September 26, 2010. This period coincided with a recession in the United States, the company's major market. Nevertheless, after sluggish growth in 2009, the company's growth trajectory picked up in 2010 again, and it recorded significant increases in both revenues and net income. This paper will analyze the financial performance of Whole Foods, based on the 2010 financial data.
Income Statement
The shareholders will likely have been quite pleased with the company's performance in 2010. The first element of performance is in the income statement, which highlights the profit/loss performance for the company. Whole Foods recorded revenue of $9 billion in the 2010 fiscal year, up from $8.03 billion in the previous year. The net income increased from $118 million to $240 million. Thus, the company not only increased sales, but it increased its margins as well. The revenues were up by 12.1% but the net income was up by 103%. The gross margin did not change much -- up from 34.2% to 34.8% - which reflects that the pricing power of Whole Foods did not change much. A 200x markup is about normal for firms in the grocery business.
Where Whole Foods improved its profits was in curtailing its internal expenses. The company's operating profit jumped from $284 million in 2009 to $437 million in 2010, an increase of 53%. The biggest expense category, direct store expenses, increased by 10.7%, so there were some gains there, but the biggest improvement in costs came with declines in pre-opening expenses and closing costs. These were high in 2008 and 2009 in part because of the restructuring that resulted from the purchase of Wild Oats in 2007, as that required store closings. There was no significant change in the number of new stores opened in 2010, so for those expenses to decline indicates that the company might be getting more efficient at that. The slightly higher efficiency in the other expense categories likely stems from the fact that Whole Foods was more dependent...
Strategic Review Whole Foods Market is one of the top retail stores dealing with organic and natural foods in the United States. The company operates and owns a chain of organic and natural foods supermarkets across the United States and Canada. In essence, the company has been able to reach large number of customer by operating through several subsidiaries, and Whole Foods is the first company in the United States to
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Whole Foods company has, through the last several years, changed various business strategies and practices used by the company all in an effort to address the onset, and lingering influences, of a devastating recession, not only in America but around the world. Some of the strategic actions implemented include; scaling back on the size and number of stores the company sought to open and expand in new and existing markets,
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